Re: FHA..... Disputed Accounts & Collections. UPDATE!!!

Thank you for your contribution.Can you explain some more about the roll back the proposed dispute accounts rule? We would greatly appreciate it.

old rule:

If the credit report reveals that the borrower isdisputing any credit accounts or public records,the mortgage application must be referred to aDE underwriter for review.

proposed rule:

If the Automated Underwriting System using the TOTALMortgage Scorecard rates the mortgage loan application as anAccept, the mortgage application will no longer be referred to aDE underwriter for review due to disputed accounts, as long asthese accounts meet both of the following conditions:The total outstanding balance of all disputed creditaccounts or collections are less than $1,000,andDisputed credit accounts or collections are aged twoyears from date of last activity as indicated on the mostrecent credit report.

they rescinded the proposed rule.

not it is back to underwriter discretion.

my internal guidelines say that the disputes have to be 'resolved'

many banks are the same.

best advice? => get all of the disputes resolved before you get your credit pulled. <= this gives us a valid credit score.

also.... the bureaus might leave a 'statement' on the account saying that you dispute the acccount. this doesnt mean that the account is actually in dispute.... it means that you dont agree and are saying so with a statement.

bad news about that: underwriter cannot tell if it is an ongoing dispute or a statement.... so you will have to get the statemeent removed as well.

best practice with regards to disputes: contact each bureau and have them remove ALL DISPUTES and STATEMENTS OF DISPUTES from the reports.

did that make sense?

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